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USDA Foreign Agricultural Service
GAIN Report
Global Agriculture Information Network
Template Version 2.09
Required Report - public distribution
Date: 2/27/2004
GAIN Report Number: KS4011
KS4011
Korea, Republic of
Food Processing Ingredients Sector
Food Processing Ingredients Sector
2004
Approved by:
Marcus E. Lower, ATO Director
Agriculture Trade Office, Seoul
Prepared by:
Seh Won KIM, Ag. Marketing Specialist
Report Highlights:
Korea is a major importer of raw materials and ingredients for food processing. Over 70
percent of food products in Korea are imported. The size of the Korean food processing
industry is estimated at $35.7 billion for 2002, up 8 percent from $33 billion in 2001. U.S.
raw materials and ingredients for use in food processing have a strong opportunity in Korea.
Includes PSD Changes: No
Includes Trade Matrix: No
Unscheduled Report
Seoul ATO [KS2]
[KS]
GAIN Report - KS4011 Page 2 of 17
Table of Contents
SECTION I. Market Summary .................................................................................. 3
SECTION II. ROAD MAP FOR MARKET ENTRY .......................................................... 4
A. ENTRY STRATEGY ............................................................................................ 4
B. MARKET STRUCTURE ............................................................................................ 5
C. COMPANY PROFILES ............................................................................................. 6
D. SECTOR TRENDS ................................................................................................. 7
Food Processing Sector .......................................................................................... 8
Food Ingredient Processing .................................................................................... 9
Confectionary and Bakery ...................................................................................... 9
Non-alcoholic Beverages Processing ...................................................................... 10
Dairy Processing ................................................................................................. 10
Meat Processing .................................................................................................. 10
Seafood Processing ............................................................................................. 10
SECTION III. COMPETITION ..................................................................................11
SECTION IV. BEST PROSPECTS ..............................................................................14
SECTION V. KEY CONTACTS AND FURTHER INFORMATION ....................................15
UNCLASSIFIED USDA Foreign Agricultural Service
GAIN Report - KS4011 Page 3 of 17
SECTION I. Market Summary
The gross output of the Korean food processing industry, including beverages and seafood, is
estimated at $35.7 billion (42.9 trillion Won, $1 = 1,200 Won) for 2002, up 8 percent from
$33 billion in 2001. The sector is composed of about 7,600 enterprises and about 183,000
employees. Sectoral growth of 3-5 percent annually is expected for the foreseeable future.
The total imports of agricultural, food, fishery and forestry products in 2003 are estimated at
$13.2 billion from the world. With $3.5 billion in sales, the U.S. accounted for 26 percent of
Korean imports. Due to the lack of arable farmland, high production costs and growing food
requirements, Korea has been a major importer of basic foodstuffs for further processing.
Korea imports about 70 percent of total agricultural product needs. The U.S., China,
European Union (EU) and Australia are the major agricultural exporters to Korea. With a
territory about the size of the state of Indiana and population estimated at 48 million, Korea
was the 5th largest market for U.S. agriculture in 2003.
Output of Food Processing Industry by Sector in 2002
Fruit & Vegetable Sugar manufacturing
Processing (2.8%) (1.9%)
Fats & Oils Starch & Sweeteners
manufacturing (3.0%) manufacturing (1.8%)
C ocoa & sugar Meat processing
confectionery (3.0%) (10.9%)
Grain processing
(10.3%)
Noodles and similar
products (4.0%)
Seasonings, spices & Dairy & Ice cream
Food additives (5.6%) (9.9%)
Bread & Grain
preparations (5.7%) Feed processing (9.6%)
C offee, tea, soup &
other foods (5.9%)
Alcoholic beverages
(8.5%)
Fish and marine Non-alcoholic beverages
products (6.9%) (7.4%)
Except for rice, which has a large surplus, Korea imports a broad range of basic, intermediate
and semi processed agricultural products. Corn, soybeans, wheat, essential oils, frozen
UNCLASSIFIED USDA Foreign Agricultural Service
GAIN Report - KS4011 Page 4 of 17
concentrated orange juice, turkey meat, duck meat, almonds, walnuts, powdered milk, whey
powder and beef tallow, seafood, processed fruits and vegetables, coffee, potato products,
vegetable oils and cocoa products exemplify the raw materials and ingredients imported into
Korea for use in food processing. U.S. suppliers have a strong opportunity to export inputs
for use in food processing in Korea.
The United States is the largest supplier of agricultural, food and fishery products to Korea,
with a 27.9 percent market share in 2002, followed by China with 19.7 percent, the EU with
11.2 percent and Australia with 8.9 percent. These four countries account for about 68
percent of the total Korean agricultural, food and fishery product imports in 2002.
Table 1. Imports of Agricultural, Food and Seafood in Korea: 2002 ($million)
Sector Total U.S. China EU Australia Others
Value Value Share Value Share Value Share Value Share Value Share
Bulk 2,749 772 28.1 844 30.7 43 1.5 464 16.9 626 22.8
Intermediate 3,142 842 26.8 312 9.9 382 12.1 233 7.4 1,373 43.7
Consumer 3,474 1,346 38.8 337 9.7 771 20.5 301 8.7 719 20.7
Seafood 1,820 165 9.0 711 39.1 55 3.0 1.4 0.1 888 48.8
Total 11,185 3,125 27.9 2,204 19.7 1,251 11.2 999.4 8.9 3,606 32.2
Note: Forest products excluded
Source: Korea Trade Information Service, compiled by ATO Seoul
Table 2. Advantages and Challenges for U.S. Agricultural, Food and Fishery Products.
Advantages Challenges
Diminishing resistance to imported foods Tariffs of food ingredients are generally
higher than those of high value products
Confidence in U.S. foods U.S. prices are generally higher than those of
competitors' food ingredients
Almost all agricultural and food products are Occasional sanitary/phytosanitary issues
importable cause suspension of imports
Equal or superior quality to domestic and Food safety concerns and biotech issues
competitors' products
Increasing affluence of Koreans Frequent changes in food regulations
Young generation is becoming more Onerous inspection/Customs clearance
Westernized procedures
Weakening dollar vis-à-vis the Won makes High test fees for chemical residues in grains
U.S. products more price competitive
SECTION II. ROAD MAP FOR MARKET ENTRY
A. ENTRY STRATEGY
U.S. agricultural, food and fishery products are generally considered by Koreans as high
quality but the prices are generally higher than those of U.S. competitors. When considering
the Korean market, exporters should conduct preliminary research to determine if the market
is appropriate for the product. Possible sources of market information include Korean
importers, U.S. state departments of agriculture, the U.S. Agricultural Trade Office (ATO)
website, and the U.S. Department of Commerce. Lists of Korean importers, by product, can
UNCLASSIFIED USDA Foreign Agricultural Service
GAIN Report - KS4011 Page 5 of 17
be obtained from the U.S. Agricultural Trade Office, or through the U.S. Department of
Agriculture (USDA)/Foreign Agricultural Service in Washington, D.C. The next step might
include sending catalogues, brochures, product samples, and price lists to prospective
importers as a way of introducing the company and products.
Once contact is established, it is advisable to visit the importer(s) in person, which will
increase the seller's credibility with the Korean importer and give an opportunity to see the
Korean market first hand. In Korea the clichés about "seeing is believing" and "one visit is
worth a 1,000 faxes" are especially true. There is no substitute for face-to-face meetings.
The supplier or exporter should bring samples as well as product and company brochures,
price lists, shipping dates, supply data, and any other information needed for negotiating a
contract. While information in English is acceptable, having it in Korean is helpful and
demonstrates serious interest in the market. A general overview of the firm in Korean is a
good starting point.
Another way of finding potential importers is to participate in local food shows to showcase
your products to a larger audience. Many Korean importers attending shows are seeking to
establish reliable long-term trading relationships. Show participation enhances initial
contacts with importers, agents, wholesalers, distributors, retailers and others in the food
and beverage industry. A list of Korean trade shows is available from the ATO. See Section
V for contact information.
American companies should be sensitive to the uniqueness of the Korean market. An
approach or a product that was successful in another market does not mean it will be
applicable to Korea. It will be necessary to review the product design, packaging and market
approach for the Korean situation, requirements and tastes. A well-developed relationship
with a Korean importer is an asset when determining how to best market a product.
For exporters of high-value niche market products, the Mid-America International Agri-
Trade Council (MIATCO) offers a Distributor Development Service (DDS), which provides a
series of cost-effective services designed to assist U.S. suppliers with specific information on
whether and how to approach the Korean market. MIATCO will also assist U.S. food
companies in establishing and solidifying contacts in the Korean import, distribution, retail,
food service, or food processing sectors through trade servicing and in-market assistance.
See Section V for MIATCO's contact information.
Finally, in the Korean market, never take anything for granted. Be ready for the
unexpected. Just because the first container cleared customs, does not mean the second
one will. Be open for new information, attentive and patient.
B. MARKET STRUCTURE
The chart below gives an overview of the usual distribution channel for imported food
ingredients from U.S. exporters to Korean food processors.
US exporter -- Retail
-- Importer/ -- Distributor -- Food
agent processor
-- HRI
UNCLASSIFIED USDA Foreign Agricultural Service
GAIN Report - KS4011 Page 6 of 17
Large food processing companies generally prefer to buy food ingredients directly from
overseas suppliers when the quantities are large. These large companies often prefer to
purchase from local importers, agents or distributors when the quantities are small.
C. COMPANY PROFILES
Below is a table with profiles of the major Korean food manufacturing companies.
Information includes company sales, the main end-use channels, production location,
procurement channels and contacts.
Table 3. Company Profiles
Company Sales in End-use Plant Location Procurement Contacts
Product types 2002 Channel (No. of Plants) Channels
($Million)
Nong Shim 978 Retail Korea (5) Direct and *P. 02-820-7114
(Instant noodles, and HRI China (2) other importers *F. 02-820-7024
snacks) *W. nongshim.co.kr
Lotte Chilsung 969 Retail Korea (2) Direct and P. 02-3479-9114
(Soft drinks, and HRI other importers F. 02-535-8619
juices, milk) W. lottechilsung.co.kr
CJ 693 Retail Korea(10) Direct and P. 726-8114
(sugar, spices, and HRI Indonesia (3) other importers F. 02-726-8049
seasonings, wheat Philippines (1) W. cheiljedang.com
flour, edible oils, Australia (1)
meat processing) Vietnam (1)
Lotte 581 Retail Korea (4) Direct and P. 02-670-6114
Confectionery and HRI U.S. (1) other importers F. 02-6672-6600
(Confectionery, Vietnam (1) W. lotteconf.co.kr
chewing gum, ice Russia (1)
cream) China (1)
Dong Suh Foods 484 Retail Korea (6) Direct and P. 02-3271-0114
(Coffee, tea, and HRI other importers F. 02-714-9414
honey, snacks) W. dongsuh.co.kr
Lotte Ham 474 Retail Korea (3) Direct and other P. 02-3479-5314
(Pork, ham) and HRI importers F. 02-3479-5100
W. Lottehammilk.co.kr
Haitai Beverage 366 Retail Korea (3) Direct and P. 02-3219-7114
(Soft drinks, and HRI other importers F. 02-651-9084
juices) W. htb.co.kr
Haitai 364 Retail Korea (2) Direct and P. 02-709-7766
Confectionery and HRI U.S. (1) other importers F. 02-790-8123
(Confectionery, W. ht.co.kr
chewing gum, ice
cream)
Coca Cola Korea 334 Retail Korea (3) Direct and P. 02-2259-5888
Bottling and HRI other importers F. 02-2259-5593
(Soft drinks, other W. cckbc.co.kr
beverages)
Orion 316 Retail Korea (3) Direct and P. 02-710-6000
(confectionery, and HRI Japan (1) other importers F. 02-719-2582
chewing gum & W. orion.co.kr
snacks)
Ottogi 311 Retail Korea (2) Direct and P. 02-528-1381
(ketchup, and HRI Japan (1) other importers F. 02-528-1949
mayonnaise, W. ottogi.co.kr
curry)
UNCLASSIFIED USDA Foreign Agricultural Service
GAIN Report - KS4011 Page 7 of 17
Daerim Corp. 209 Retail Korea (2) Direct and other P. 02-3470-6000
(Fish cake, and HRI Chile (1) importers F. 02-523-8900
imitation crab Japan (1) W. daerimi.com
meat, pickled U.S. (1)
seafood, frozen China (1)
fish products,
dried fish cake,
fish sausage)
Shany 196 Retail Korea (3) Direct and P. 031-739-2000
(bread, ice cream) and HRI other importers F. 031-739-2011
Paris Croissant 190 Retail Korea (2) Direct and P. 031-740-5500
(bread, and HRI other importers F. 031-740-5520
confectionery) W. paris.co.kr
Samyang 183 Retail Korea (11) Direct and P. 02-740-7114
(Sugar, edible oils, and HRI Japan (1) other importers F. 02-743-7720
premixes, wheat U.S. (1) W. samyang.co.kr
flour) Germany (1)
Vietnam (1)
Hong Kong (1)
Korea Nestle 181 Retail Korea (1) Direct and via P. 02-590-0011
(Coffee, infant and HRI other importers F. 02-737-2295
formula, W. nestle.co.kr
nutritional food)
Korea Yakult 176 Retail Korea (3) Direct and via P. 02-3449-6000
(Instant noodle, and HRI other importers F. 02-3449-6655
fermented milk) W. yakult.co.kr
Ottogi Ramyun 167 Retail Korea (2) Direct and via P. 031-683-1811
(Instant noodles) and HRI Japan (1) other importers F. 031-683-1242
W. ottogi.co.kr
Namyang Milk 159 Retail Korea (3) Direct and via P. 02-734-1305
(Processed milk and other importers F. 02-739-9689
products, HRI W. namyangi.com
beverages, tea)
Samyang Food 157 Retail Korea (2) Direct and via P. 02-940-3000
(Instant noodles, and HRI U.S. (1) other importers F. 02-942-4350
snacks, soy sauce, China (1) W. samyangfood.co.kr
ice cream, milk)
Donga Otsuka 150 Retail Korea (3) Direct and via P. 031-470-2114
(Beverages, soy and HRI other importers F. 031-470-0436
milk) W. donga-otsuka.co.kr
Sales included only food products and packages, but meat products not included.
*P stands for phone number, *F for fax number and *W for Website.
Note: Country code for Korea is 82. The "0" of the city code is dropped when calling from
abroad.
D. SECTOR TRENDS
The Korean food and beverage manufacturing and processing industry is a major consumer
of imported raw materials, intermediate products, ingredients and additives. Imports are
necessary to support the processing industry due to limited local supply in terms of quantity
and variety. Over 70 percent of Korea’s food products are imported. The area of cultivated
land declined to 1,863,000 hectares in 2002, down more than 6 percent from 1,985,000
hectares in 1995, due mainly to the loss of farmland to ever expanding urbanization.
Korea has a diverse food-processing sector. Concurrently, Korean consumers exhibit a
tendency for nationally produced goods, while still seeking an expanding variety of products.
UNCLASSIFIED USDA Foreign Agricultural Service
GAIN Report - KS4011 Page 8 of 17
Increased buying power, international travel and cosmopolitan living all lend to growing
demand for a diversity of locally produced food items.
Table 4. Output of Food Processing by Sector: 2002
Food Processing Sector Gross output ($million) Share (%)
Meat processing 3,895 10.9%
Grain processing 3,691 10.3%
Dairy & Ice cream 3,535 9.9%
Feed processing 3,430 9.6%
Alcoholic beverages 3,030 8.5%
Non-alcoholic beverages 2,637 7.4%
Fish and marine products 2,449 6.9%
Coffee, tea, soup & other foods 2,124 5.9%
Bread & Grain preparations 2,028 5.7%
Seasonings, spices & Food additives 2,001 5.6%
Noodles and similar products 1,426 4.0%
Cocoa & sugar confectionery 1,086 3.0%
Fats & Oils manufacturing 1,066 3.0%
Fruit & Vegetable Processing 1,014 2.8%
Sugar manufacturing 676 1.9%
Starch & Sweeteners manufacturing 637 1.8%
Total 35,731 100.0%
Most Korean food and beverage manufacturers are small-scaled companies. As of the end of
2002, there were 7,550 food, livestock, dairy and beverage manufacturing companies with a
labor force of five or more across Korea. Of these there are only 16 manufacturers with 500
employees or over as shown on the following table. Only 4 percent (304 manufacturers)
have 100 or more employees.
Table 5. Employment Size of Food and Beverage Manufacturers: 2002
No. of Employees No. of Manufacturers Percent
5-9 3,718 49.2%
10-19 1,810 24.0%
20-49 1,291 17.1%
50-99 427 5.7%
100-199 198 2.6%
200-399 54 0.7%
300-499 36 0.5%
500 and Over 16 0.2%
Total 7,550 100.0%
UNCLASSIFIED USDA Foreign Agricultural Service
GAIN Report - KS4011 Page 9 of 17
Korea imports a wide variety of agricultural products for processing such as corn, soybeans,
wheat, essential oils, frozen concentrated orange juice, turkey meat, duck meat, almonds,
walnuts, powdered milk, whey powder, coffee, animal and vegetable fats and oils, beef tallow,
seafood, processed fruits and vegetables, coffee, potato products, vegetable oils and cocoa
products. In 2002, Korean self-sufficiency of rice is estimated at 107 percent, wheat at 0.2
percent, barley at 60.4 percent, soybeans at 7.3 percent and corn at 0.7 percent. In 2002
Korea imported 3.9 million metric tons (MT) of wheat valued at $543 million, 9.1 million MT
of corn valued at $988 million and 1.5 million MT of soybeans valued at $329 million. U.S.
suppliers have a strong opportunity to export raw materials or ingredients for use in food
processing in Korea.
Local eating habits have changed dramatically in recent years. A diet that had long been
based on rice became progressively more centered on wheat and protein. At the same time,
consumers sought more diversity and became more quality oriented. Consumption of fish,
fruits, vegetables, marine plants and edible oil increased. Consumer preferences also shifted
toward foods that were convenient to cook rather than those that require lengthy preparation.
At the same time, demand for greater quality in terms of flavor and nutrition increased, a
sharp departure from a diet that previously emphasized calorific content. Consumers
became more health and safety conscious in their food buying habit as ingredients,
packaging, shelf life and toxicity became important determinants of purchasing behavior.
Spending habits also became diversified as individual preferences and a wider variety of
foods became available to meet consumer demand. These shifts toward quality, variety,
convenience, safety and health resulted not only increased consumption of processed food,
but also stimulated the growth of the domestic food processing industry.
Food Ingredient Processing
There are a total of 8 wheat flour millers with 11 plants in Korea. One hundred percent of
wheat for flour milling is imported mostly from the U.S., Australia, Canada, China, and India.
The flour market continued to expand with increasing per capita income and change of diet
from rice to wheat based food over the past decades. However, the wheat flour market grew
by about 2-3 percent annually until 1990's, but is now stagnant. Per capita consumption of
wheat in Korea was 37 Kg. in 2002.
No sugar is produced in Korea, so all raw sugar is imported. There are currently three sugar-
refining companies in Korea with a total annual production of about 1.3 million metric tons.
Sugar is widely used in food sectors, including confectionery, jam and jelly, powered milk,
bakery, cake, beverages and fruit based alcohol. Korea also exports about 35 percent of its
refined sugar production. The industry is expected to grow at about 2-3 percent annually for
the foreseeable future.
There are 4 companies in Korea which produce starch and starch syrup with corn as a raw
material. All the corn used in this sector is imported. The total amount of corn used in
starch and starch syrup production amounted to about 2 million metric tons in 2002.
Although this sector has not grown much compared to that of other sectors, there is much
room for U.S. sales to grow in the future. China has become the major corn supplier to
Korea but this trend may be changing as Chinese corn export policies are revised.
Confectionary and Bakery
The Korean confectionery market increased by 8.8 percent to $1.7 billion in 2002 from $1.59
billion the previous year. This is big growth relative to other food processing sectors. By
category, the largest increasing was chewing gum, which jumped 33.4 percent, followed by
UNCLASSIFIED USDA Foreign Agricultural Service
GAIN Report - KS4011 Page 10 of 17
chocolate (13.7 percent), pie (11.4 percent), biscuits (9.7 percent), and candy (7.6 percent).
Among the individual products, snacks were the biggest category with $483 million, followed
by cookies with $411 million, and chewing gum with $287 million. There were about 13,000
bakery shops across Korea in 202. However, the 5 top franchised and mass production
bakery companies, with about 2,400 shops, took a 31 percent share of the $2.5 billion
market in 2002.
Non-alcoholic Beverages Processing
The non-alcoholic beverage segment grew by about 2 percent in 2002. By segment, the
carbonated beverage market increased to about $983 million, up from $967 million in 2001,
the juice market increased to $783 million, up from $767 million, and other beverage market,
including soy milk, water and sports water, increased to $967 million, up from $933 million.
The non-alcoholic beverage market is diversified, the product life cycle is shorter, the sector
requires diversified and complex marketing activities, and many new to market products are
developed every year.
Dairy Processing
Korean society is rapidly adopting many aspects of Western societies, such as dual-income
families, fewer children, fewer family members, less time to spend on cooking, and dining
out with greater frequency. Increasing disposable incomes mean that Koreans can also
indulge their growing health consciousness and concerns about nutrition. The major dairy
companies are naturally adapting to meet the changing demands of their customers. Dairy
products are not just a foodstuff, but also offer health benefits.
Probiotic drinking yogurts, for example, appeal to a broad range of customers thanks to their
high nutritional values and convenience. Aggressive marketing efforts help to impress upon
the public the benefits offered by the product. Similar health benefits to those offered by
probiotic yogurts are expected to be extended to related dairy products like milk and cheese.
Consumers are willing to pay premium prices for health foods, so the dairy companies will
make great efforts to launch premium brands in the future with a focus on health benefits.
Meat Processing
Total processed meat production in Korea was 157,230 metric tons, broken down to 60,200
tons of ham, about 40,400 tons of sausage, about 2,000 tons of bacon, 26,700 tons of
canned meat, and 28,000 tons of mixed sausages in 2002. Pork accounts for nearly the
entire sector. Meat processing has continued to grow since 1999, that is, up about 7 percent
in 1999, up 14 percent in 2000, up 10 percent in 2001 and up another 10 percent in 2002.
Seafood Processing
Korea processed about 1.4 million tons of fish and seafood in 2002. Imported seafood
products are utilized for both domestic consumption and re-export. Seafood is imported into
Korea from many countries. Major suppliers include China, Russia, the United States, Japan
and Vietnam. In 2002, these five countries accounted for over 70 percent of total Korean
seafood imports on a value basis. In 2002, China became the largest seafood supplier to
Korea by exporting $711 million, followed by Russia at $214 million, the U.S. at $165 million,
Japan at $142 million, and Vietnam at $122 million. The major species imported to Korea in
2002 were yellow Corvina($138 million), Alaska pollack($90 million), hair tail($81 million),
Alaska pollack roe($80 million), shrimp($51 million), Alaska pollack surimi($49 million), and
poulp squid($40 million). All of the noted product was frozen.
UNCLASSIFIED USDA Foreign Agricultural Service
GAIN Report - KS4011 Page 11 of 17
Table 6: Imports of Major Fishery Products: U.S. and the World: 2002 (US$1,000)
Fish Species From U.S. From World
Pollack surimi, frozen 48,439 48,772
Angler, frozen 37,486 69,990
Roes of Pollack, frozen 20,108 80,174
Other surimi, frozen 8,730 64,818
Hagfish, frozen 5,529 7,098
Other flat fish, frozen 4,832 18,632
Alaska Pollack, frozen 4,468 89,492
Cod, frozen 3,469 14,602
Angler, fresh 2,925 3,865
Atka mackerel, frozen 2,921 13,117
Other roes, frozen 2,556 7,227
Ray, frozen 1,871 12,052
Prepared sea cucumber 1,411 4,892
Rock fish, frozen 1,323 9,646
Sable fish, frozen 903 919
Plaice, frozen 881 1,865
Sardines, frozen 811 5,928
Cod, fresh 652 3,425
Rock lobster, frozen 589 3,796
Shrimps and prawns 589 51,482
other than peeled,
frozen
Pacific salmon except 565 2,876
Sockeye
Source: Statistical Yearbook of Foreign Trade 2002
SECTION III. COMPETITION
The United States is the largest supplier of agricultural products to Korea with a 27.9 percent
market share in 2002. However, the U.S. competes with many other countries for many
products, such as, corn with China and Brazil, wheat with Australia, soybeans with Brazil,
red meat with Australia, dairy products with the EU, Australia and New Zealand, and fish with
China, Russia and Japan.
A brief review of imports by major product category follows. The market shares stated in
this section are based on 2002 Korean imports.
Table 7. Major Imports by Product Category by Origin: 2002
Product Import Major Supply Strengths of Advantages
Category Market Sources in 2002 Key Supply and
UNCLASSIFIED USDA Foreign Agricultural Service
GAIN Report - KS4011 Page 12 of 17
Size in Countries Disadvantages
2002 of Local
($Million) Suppliers
Beef 848 U.S. (70%) U.S. strong in Consumers
(HS 0201 & Australia (22%) supplying all state they
0202) New Zealand (5%) types of cuts prefer domestic.
due to price and Local supplies
quality are short.
competitiveness.
Pork 206 EU (55%) EU prices are Koreans are big
(HS 0203) Canada (15%) reasonable. consumers of
U.S. (7%) pork and have a
Australia(2%) large pork
production, but
most of the
feed ingredients
are imported.
Poultry meat 102 U.S. (55%) U.S. prices are Avian flu broke
(HS 0207) Thailand(41%) competitive in in Korea.
China (2%) case of chicken Almost all feed
legs. Thai ingredients are
prices are imported.
competitive.
Fish and seafood 1,676 China (41%) Chinese and Shortages of
products Russia (13%) Russian prices local supply.
(HS 03) U.S. (10%) are competitive
Japan (8%) and are closer
Thailand (4%) to Korea. U.S.
fish is high
quality.
Dairy products 147 EU (28%) The prices of Local production
(HS 04) Australia (26%) EU, Australia cost is high and
New Zealand (23%) and New most feed
U.S. (16%) Zealand are ingredients are
competitive. imported.
Prepared fruits 215 U.S. (42%) U.S. quality is Local production
and vegetables China (28%) high and prices cost is high.
(HS 2001-8) Thailand (7%) are competitive.
EU (5%) Chinese prices
are low.
Sugar 47 China (25%) Chinese prices All raw sugar is
Confectionary EU (21%) are competitive. imported in
products Japan (12%) Korea.
EU quality is
(HS 1704) U.S. (11%)
high.
Indonesia (8%)
Wines 29 EU (75%) Korean Local production
(HS 2204) U.S. (15%) consumers is very little, if
Australia (5%) accept French any. More
wines as high Koreans are
quality. U.S. drinking wines.
wines are
becoming
UNCLASSIFIED USDA Foreign Agricultural Service
GAIN Report - KS4011 Page 13 of 17
popular.
Tree nuts 28 U.S. (85%) U.S. is a No almond is
(HS 0801 & Australia (2%) dominant produced in
0802) supplier of Korea.
almonds.
Bakery products 58 EU (29%) U.S. and EU Almost
(HS 1905) U.S. (28%) biscuits, cookies ingredients are
China (25%) and crackers are imported in
high quality. Korea.
Citrus products 95 U.S. (96%) Tariff for oranges Local production
(HS 0805) Australia (2%) declined in 2004 of oranges is
from 54.9% to almost non-
50%. U.S. is the
existent.
predominant
supplier.
Fruit juices (HS 102 Brazil (42%) Brazil is a stable No FCOJ is
2009) U.S. (37%) and cheap produced.
EU (7%) supplier of FCOJ
China (4%) and the U.S.
FCOJ is high
quality.
Grains 1,605 China (45%) Chinese corn Except for rice,
(HS 10) U.S. (21%) prices are almost all
Australia (12%) cheaper than grains are
Brazil (9%) those of imported in
competitors and Korea.
China is closer
to Korea.
Oilseeds 391 U.S. (71%) The U.S. is a Shortage of
(HS 1201-7) China (13%) stable and high supply in Korea.
Brazil (10%) quality supplier.
Animal feeds (HS 102 U.S. (27%) U.S. and EU pet Almost all feed
2309) EU (26%) foods are of ingredients are
Australia (11%) high quality. imported.
China (8%)
Sauces & 74 China (44%) Chinese sauces Koreans have
condiments U.S. (17%) are competitive their own
(HS 2103) Japan (15) in prices. traditional
Australia (2%) sauces and
New Zealand (2%) condiments.
Coffee, tea and 104 China (17%) Chinese prices Korean prices of
spices Vietnam ((15%) are competitive red pepper are
(HS 09) Indonesia (11%) in red pepper high. Korea
Columbia (9%) and Vietnam, does not
Honduras (9%) Indonesia, produce coffee
Brazil (7%) Columbia and beans.
U.S. (6%) Honduras are
competitive in
coffee beans.
UNCLASSIFIED USDA Foreign Agricultural Service
GAIN Report - KS4011 Page 14 of 17
Animal and 278 Malaysia (30%) Malaysia is Korean does not
vegetable oils U.S. (21%) strong in palm produce palm
and fats Argentina (17%) oil, and U.S. is oil, and does
(HS 1501-18) EU (7%) strong in beef not have many
Indonesia (7%) tallow, fish oils, ingredients.
Canada (5%) soybean oil and
edible mixed
oils.
Prepared meat 186 Vietnam (18%) Vietnam is Korea does not
and seafood China (16%) strong in have enough
(HS 16) Thailand (14%) prepared jerk raw materials
EU (14%) filefish, China is and Korean
U.S. (11%) strong in prices are high
New Zealand (4%) prepared fish compared to its
and Thailand is competitors'.
strong in
prepared
shrimps and
chickens.
Chocolate 93 U.S. (34%) U.S. is strong in Korea does not
products EU (28%) medium quality produce cocoa
(HS 1806) Australia (11%) chocolate and its
Turkey (6%) products and EU processed
China (4%) is strong in high chocolate
New Zealand (3%) quality products are
chocolate expensive and
product. not high quality.
Ice cream 10 U.S. (60%) U.S. is strong in Korea does not
(HS 2105) EU (36%) high quality ice produce high
New Zealand (4%) cream. quality ice
cream.
SECTION IV. BEST PROSPECTS
Korea imports a wide variety of agricultural, food, fishery products and ingredients for
domestic consumption, and also re-exports some final product to other countries after
importing raw and/or semi-finished ingredients and manufacturing them in Korea. The
following are products which have presence in Korea and have good increased sales
potential to the processing sector
Table 8.Category A: Products Present in the Market Which Have Good Increased Sales
Potential
Product 2002 2002 5 Yr. Avg. Import Key Constraints Market
Category Market Imports Annual Tariff Rate over Market Attractivenes
Size Volume: Import Development s for U.S.
(1,000 (1,000 mt) Growth
mt) Value: Total:
($ Million) U.S.:
UNCLASSIFIED USDA Foreign Agricultural Service
GAIN Report - KS4011 Page 15 of 17
Red meat 1,359 109 34.80% Beef: 40% Consumers state U.S. strong in
$1,054 44.80% Chilled they prefer supplying all
Pork: domestic. types of cuts due
22.5% to price and
Frozen quality
Pork: 25% competitiveness.
Poultry 386 439 44.30% *18-20% Not manually Price-competitive
Meat $101 51.30% trimmed. in case of chicken
legs
Citrus 880 109 36.50% Orange: High tariff ratesTariff for oranges
35.70% 50% and quality will decline in
$95 variable. 2004 from
Grapefruit & 54.9% to 50%.
lemon: U.S. is the
30% predominant
supplier.
Offals & NA 69 44.30% Offals: Not easy to meet Product not
Guts $137 47% 18% local importers' consumed
specifications domestically in
Guts: the U.S., but
27% demand in Korea
for food use is
quite high and
steady.
Chocolate $293 mil 31 19.50% 8% Low image for Competitive in
$93 22.40% design and prices and design
quality for high for medium
quality product quality products
Frozen and NA 151 14.30% *8-30% High prices U.S. product is
Processed $121 30.80% compared to considered high
Vegetables competitors quality
Wine NA 12 52% 15% Fewer varieties Consumption is
$29 60.80% than French; growing rapidly
higher prices
than Chilean and
Australian wines
Fish and 3,212 1,110 40% *10-20% US prices are Good quality
Seafood $1,820 21.90% higher than those
of competitors
Almonds 5 5 8.30% 8% Demand is High profile and
$17 7.70% limited high quality
Sauces NA 54 21.90% 8% US bottles are a High quality
$74 13.40% little too big for
consumers.
*The tariff rates are different depending upon the product, and for some fish there are
adjustment tariffs, which are a lot higher than the above. For accurate tariff rates, please
contact ATO Seoul.
SECTION V. KEY CONTACTS AND FURTHER INFORMATION
For further information about the Korean agricultural market, please contact:
UNCLASSIFIED USDA Foreign Agricultural Service
GAIN Report - KS4011 Page 16 of 17
U.S. Agricultural Trade Office
Korean Address: Room 303, Leema Building, 146-1, Susong-dong, Chongro-ku
Seoul 110-140, Korea
U.S. Mailing Address: US Embassy Seoul, Unit 15550-ATO, APO, AP 96205-5550
Telephone: 82-2 397-4188 Fax: 82-2 720-7921
E-mail: atoseoul@usda.gov Website: www.atoseoul.com
Agricultural Affairs Office
Korean Address: U.S. Embassy, 82, Sejong-ro, Chongro-ku, Seoul 110-140, Korea
U.S. Mailing Address: US Embassy Seoul, Unit 15550-AgAff, APO, AP 96205-5550
Telephone: 82-2 397-4297 Fax: 82-2 738-7147
E-mail: agseoul@usda.gov
For more information on how you can register for USDA/FAS’s Supplier List:
The United States Department of Agriculture’s Foreign Agricultural Service (USDA/FAS) offers
information and services that can be beneficial to both new and experienced exporters. For
example, the U.S. Suppliers Service is a searchable database of over 5,000 U.S. exporters
and their products, which is used by USDA/FAS to help facilitate connecting potential buyers
with U.S. suppliers. This database is used by more than 85 USDA FAS Overseas offices, such
as the ATO in Seoul, Korea, to help export agents, trading companies, importers and foreign
market buyers locate U.S. suppliers. It is also used to recruit U.S. exporters to participate in
market development activities sponsored by USDA and federal export programs.
You can register online for this service at
http://www.fas.usda.gov/agexport/exporter.html
AgConnections Team
AgExport Services Division, Foreign Agricultural Service, Washington, DC
Phone: 202-690-4172 Fax: 202-205-2963
E-mail: joyce.estep@fas.usda.gov Website: www.fas.usda.gov/agx/agx.html
For further information about sanitary and phytosanitary requirements, please
contact:
U.S. Animal Plant and Health Inspection Service
Room 303, Leema Building, 146-1, Susong-dong, Chongro-ku, Seoul 110-140, Korea
U.S. Mailing Address: USDA-APHIS, US Embassy Seoul, Unit 15550, APO, AP 96205-5550
Telephone: 82-2 725-5495 Fax: 82-2 725-5496
E-mail: aphis@kornet.net Website: www.aphis.usda.gov
For information about activities by Strategic Trade Regional Groups, please
contact:
Mid-America International Agri-Trade Council (MIATCO)
400 West Erie Street, Suite 100, Chicago, IL 60610
Telephone: 312-944-3030 Fax: 312 944-1144
E-mail: eriggs@miatoco.org
Website: www.miatco.org
Western United States Agricultural Trade Association
2500 Main Street, Suite 110, Vancouver, WA 98660-2697
Phone: 360-693-3373 Fax: 360-693-3464
E-mail: bruce@wusata.org
UNCLASSIFIED USDA Foreign Agricultural Service
GAIN Report - KS4011 Page 17 of 17
Website: www.wusata.org
Eastern United States Agricultural & Food Export Council
150 S. Independence Mall West, 1036 Public Ledger Building, Philadelphia, PA 19106
Phone: 215-829-9111 Fax: 215-829-9777
E-mail: jcanono@foodexportusa.org
Website: www.foodexportusa.org
Southern United States Agricultural Trade Association
2 Canal Street Suite 2515, New Orleans, LA 70130, USA
Phone: 504-568-5986 Fax: 504-568-6010
E-mail: jim@susta.org
Website: www.susta.org
For information on the commercial and industrial products in Korea, please contact:
Foreign Commercial Service
Korean Address: U.S. Embassy, 82, Sejong-ro, Chongro-ku, Seoul, Korea
U.S. Mailing Address: US Embassy Seoul, Unit 15550-FCS, APO, AP 96205-5550
Telephone: 82-2 397-4535 Fax: 82-2 739-1628
E-mail: Seoul.office.box@mail.doc.gov Website: www.buyusa.gov/korea
F:\USERDATA\SHARED\REPORTS\04ANNUAL\FoodProcessingCY04.doc
UNCLASSIFIED USDA Foreign Agricultural Service
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